Certificate of Eligibility

by Walt
(Navarre, FL)

Entitlement code of "5" is indicated on my COE with the basic entitlement of $1820.00. $34,180 was charged to a previous VA loan. How much entitlement do I have to purchase another home? Does this mean that the VA will only guarantee $1820.00. The condo I am looking at to purchase is $60,000. Thanks!

=====ANSWER=====

Hello Walt,

Thanks for coming by my site and asking your question.

As you are no doubt aware, the VA Entitlement is the guarantee to the lender for your loan. Lenders like to see up to a 25% loan guarantee.

So in your case the $60,000 dollar condo the lender would be looking for the $15,000 loan guarantee.

So if you have only $1,820.00 left on your entitlement, either they do not have a record of the sale of the property you purchased using the VA loan previously or you did not pay off the first loan and you still have the home.

You can get your entitlement restored to the full $36,000 if you file with the VA proof you sold the first home and paid off the loan in full.

I know the Veterans Benefit Act of 2004 changed these limits to 25% of the conforming loans amounts based on Freddie Mac (which makes the benefit much more) however you must still meet the requirements of having paid off the first loan to get your entitlements restored. You can only have one VA loan at a time.

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Kind Regards,

Jeffrey Ragan